Motivation: A Twist on Insecurity

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Insecurity is when you are not feeling up to snuff, not good enough, lacking in some way. We all have it. Believe it or not, those insecurities has helped humanity build, invent, and capitalize. It has helped built skyscrapers. The Great Pyramids. The billionaire. The car. The airplane. Cures for diseases. In a nutshell, it is what makes people wake up every morning. Insecurity makes you care. Continue reading “Motivation: A Twist on Insecurity”

Multimillionaire Journey: My Credit Card Bills are Too Damn High!

My credit car bills are too damn high! If you have read my blog articles Credit Cards: Leveraging the Right Way and Bought a Bargain Property: Now What?, then you know I used many credit cards to pay for a remodel on the new property purchased. My wife and I decided to move into the property and lease out our old home. The remodel took a bit of life from me but we pulled through but now we have to pay this darn debt. A month ago it was $70,000 on credit cards! Yikes! This is not helping my Multimillionaire Journey at all.

Continue reading “Multimillionaire Journey: My Credit Card Bills are Too Damn High!”

Investment Tip 2: A Few Methods for Buying More Property

I have come across several residential investors throughout my time in real estate. Below are a few of the people I have met and their methods!

The Owner Occupied String Method

Before purchasing my first property I was simply dropping in on open houses as a lookie loo. Every time I would see a sign I would stop my car and go inside to talk to the realtors there. One day I was chauffeuring my parents to their friends house across town when I saw an Open House sign. Without thinking twice I stopped to take a look inside. Continue reading “Investment Tip 2: A Few Methods for Buying More Property”

Why Be a Slumlord?

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Why be a slumlord? Because it’s very easy. The less you do on a rental property the less money you spend, the more short term money you get, and the less time you spend on the property. That sounds great in the short term but then you end up with a tear down. I am not a slumlord. That means I spend more money, get less money on a short term basis, and spend more time on the properties. I don’t want future tear downs. These last few months I had to prepare 4 vacancies for rent, three in the last 3 weeks, and many repairs also popped up. I have been swamped because I do most of the preparation and repairs myself. That has given me little time to write on this blog.

About a week ago I was installing a built-in microwave that went bad and thought to myself how much I would be charged to outsource that job. My guess would be about $150. Then I thought about all the other stuff I had done to get that property ready for lease and its probable cost if I had outsourced the labor. Below is the breakdown:

Install Microwave: $150 labor; $400 for microwave

Paint 3 bedrooms, 1 Hallway, 1 bath, plus baseboards: $1200 labor; $150 for materials/paint

Caulk baseboards and ceilings on about half the house: $300 labor; $30 in caulk tubes

Take out large Mirror and replace with double single mirrors: $150 labor; $70 new mirrors

Clean Gutters: $100

Mow and edge lawn (big yard): $70

Paint and install all door knob hardware: $150 labor; $7 in paint

Applying Tile Sealant on all tile: $200 labor; $60 for sealant

Replace old faulty toilet: $150; $110 new toilet

Paint all closets and pantry: $400; $30 for paint

Change out faulty exhaust fan motor and light switch: $200; $20 for fan and switch

Patch large cracks with cement on front porch steps: $80

Fix Garage door sensors: $100

All together we have a grand total of $3250 for labor that would have been spent to get the property ready. But wait there is more. I outsourced professional cleaning at $160 and carpet steam clean at $165. The carpet despite the steam clean still showed many stains so I opted to install new carpet for 3 rooms at $1050. All in all if I outsourced all the work done I would have been spending about $4625, plus materials of about $877, for an ultimate grand total of $5502! Geez…why even go into the real estate rental business? Well, as for me I saved about $3250 by doing all that work myself but did I really save? I spent so much time on all day weekends and late evenings trying to get things done. I have to wonder?

And this is just one vacancy. Now imagine the time and money spent on the others. Now granted not all vacancies are so labor/cost intensive, some less, some more. But all eventually will be as intense or even more intense when bathrooms and kitchens need updating. No wonder we have slumlords.

I imagine some landlords who have to outsource all the labor, attempt to do the minimum and not fix faulty items because of the high costs. They may not have the money or do not want to spend the money. In a few years, one day they look in the mirror only to find out that they have become slumlords. Then they may hide behind management companies. The management companies hold the burden of all the complaints but can not do anything unless the landlord offers money to correct an issue. The management company has a list of excuses why a problem can not be corrected or they lie and say it will be corrected but never do.

I just gathered all my information to do my taxes. That is the only place I see some type of relief for all the work and expenses done on all the properties. All repairs are deducted from our taxable income which is an added help during tax time. Maybe it’s not so bad being a landlord afterall. Maybe.

There are big ticket stuff like two years ago when I spent $14,000 on new siding on another property. Then there are the small costs here and there that add up to big numbers. I have boxes full of receipts. I have a contractor account at Home Depot and Lowes. Sometimes my clothes are covered with paint, grime, and dirt. My van is full of tools and debris. I take calls and correct problems on a constant basis. I do not hide behind management companies but sometimes I wonder if I should? Everybody thinks its easy. I say its not and they don’t believe me. Being a slumlord is easier. I am not one of those.

 

 

 

Credit Cards: Leveraging the Right Way

Debt is bad. But not always. In another blog post I discussed how I purchased a bargain property titled Bought a Bargain Property: Now What? using Investment Tip 1: Types of Bargain Properties. At first, I attempted to get a line of credit from my home to fund all my remodeling expenses for the new property. I got rejected. Not just once. Including the combined attempts by my wife and I, we got rejected a total of 7 times by different banks!!! We didn’t get rejected because we have bad credit. The reasons stemmed from income being too low or having too many loans on our properties. What saved the day? Credit cards.

If there is one thing I learned in life is that credit cards are not that bad even though yearly interest rates hover around 10%-25% for most cards. And there are beneficial methods to the madness of credit cards. But it has to be done the right way! I will go over the why and how below:

Cashback Credit Cards

Credit cards pay me just for using them. Yes, no kidding! With my two rewards credit cards, the credit card companies PAY ME a total of about $600 to $1500 per year! If I include my wife’s returns from her credit card it is even more! Below is what I have earned so far in the past 7 months or so:

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About $400 on one and $492 on the other. Total of $892 thus far….

How does this work? Is there a method to the madness? Yes and here we go! Step one is to first acquire a credit card that offers the cashback option which are typically called Cash Rewards Credit Cards. And there are plenty online and at your local bank. Most Cash Rewards Credit Cards reward you 1%-3% of the amounts used depending on the purchase and terms of service. Step two is to use those credit cards for ALL your expenses and purchases whenever possible. This includes groceries, bills, gas, and more! Last step is the most important because this is how you make your money. Pay your credit cards before the credit card companies charge you interest. There is usually a grace period of about 21 days. Which means that if you pay before then, you get charged nothing, zero, nada! But guess what? The credit card companies now pays you! If the credit card is from the same bank from your checking account sometimes they give you even MORE money–up to 50% of your rewards amount! However, you must redeem your amount via transfer to your checking account instead of getting a check or immediate cash. That means if I was to redeem my $892 rewards by way of transfer to my checking account, the bank/credit card company will give me $446 more on top of the $892 already earned! A total of $1338! Is this madness? If it is, I am liking it.

Why do credit cards do this? The credit card companies are betting that you don’t pay them back on time and keep a balance on the card. The typical charge rate (about 10%-25%) is way higher than the rewards rate of only about 1%-3%. So if you hold a debt throughout the year, even if they give you 3% in rewards, they still make money because the charge rate will be 7-10 times higher. Also, when you don’t consistently pay within the 21 day window they charge you interest and their chances to make money increases. But if you pay before the charge window every time and do it the right way, you are the winner!

Cash Advance and Credit Card Limits

Cash Advance is having the option of drawing out a portion of your credit limit in CASH. Most credit cards have a cash advance option which is a little different from your credit card limit. Your credit card limit is the maximum amount you can use. Then you have a Cash Advance limit which is usually lower than the overall limit or equal to it. The interest rates for both are also different. For example, your credit card limit could be at 5000 at 12% and have a Cash Advance option of $1000 at 20% on the same card. Cash Advance interest rates are usually higher.

Many people think that having a high credit card limit is bad. It is not. Having very high credit card limits are beneficial in two ways. One, your credit score will go up when your debt ratio is low compared to your limit. As an example, if you have a limit of 5000 and owe $5000 you have reached your limit. Your debt to limit ratio will be high at 1/1 or at 100% which will affect your credit score negatively. Now let’s say your limit is at 25,000 and still owe the same amount of $5000. Now you are using just 1/5th of your limit, or only 20% of your limit as opposed to 100%. Your ratio is now considered low boosting up your credit score! Same debt, yet different results for your credit score!

How do you get a higher credit limit? Below are the steps:

Step 1: Call the customer service number on the back of your credit card.

Step 2: Say “I would like to request a higher credit card limit.”

Step 3: They will then ask you for the amount you want. I recommend you request double whatever your current limit is. For example if you currently have a 5000 limit ask for 10,000.

Step 4: They will then ask you for your current income, rent/mortgage information, and other minor information. They don’t verify this information. It is all verbatim. They are expecting you to be truthful in your discourse.

Step 4: They will run this information through a computer. There is a waiting period of about 5 minutes in most cases. Sometimes you will get what you requested and sometimes they come back with a different amount, usually higher than your current limit but lower than what was requested. Either way, your credit card limit is higher than before!

Step 5: Call every other month and do the same thing. Soon you will have limits that are very high. I have combined limits of about 70,000 spread out through my credit cards as an example.

How do you get a higher Cash Advance limit? Just follow the same steps except you request a higher Cash Advance limit. In fact, you could request higher limits for both at the same time. That is what I do for practicality.

Using the Cash Advance Option

The Cash Advance option is awesome to have! You will never know when you might need CASH. There are medical emergencies, death in the family, taxes due, property purchases, or in my case, for a remodeling project. But again, there is a method to getting the best deal on these advances.

Never accept the standard rate given for Cash Advances. Currently on one of my credit cards I have an interest rate of 18% if I draw out CASH. That is a lot of interest per year I will be paying, especially if I am drawing a large amount. What you do instead is call the number on the back of the credit card and ask for special promotions. They are usually way way better. The credit card companies equip the customer service representatives with these promotions to entice callers to draw out credit. Usually, people deny these requests because they don’t need or want it. What happens when you do want it? Well you call and find out what they can offer?

My Scenario with Cash Advance from a Credit Card

Again, I have an 18% rate if I draw out cash on that one credit card. I called the number on the back and asked for promotions for drawing out $20,000 in CASH. They put me on hold. The representative came back and offered me a draw out fee of 3% with no interest charged for an entire year! That means I am paying only 3%, which is the rate of inflation, on the money borrowed compared to the 18% if I didn’t call! Of course, after the year is up I will be paying the going rate of 18% but I have one whole year to pay it all back. I drew out a combined $60,000 CASH with the same 3% draw out fee from three credit cards for the remodel. I have one year to pay it all back before the high interest kicks in and that is the goal. The numbers have been run and it could be done.

To sum it all up, credit cards are not so bad. There is some method to the credit card madness.

 

 

Valentine and Marriage: A Survival Guide

Rodney: Me and my wife used to be really happy together?

Friend: Really…what happened?

Rodney: We got married.

 Joke by Rodney Dangerfield

All jokes aside, Valentines Day is coming up and many people are expecting some type of recognition including my significant other. It is a day to celebrate love. I am not talking about sexual love. I am talking about caring love. As social creatures we all need caring love. We can’t survive without it. It is as basic as water. It is one of the pillars for human survival. We all need water, food, shelter, and love. And that caring love is what I receive from my wife and I return it in a mutual symbiosis.

How I met my wife?

I was in the college library running towards the elevator. The doors were closing. I put my foot in the door, entered, and saw the most beautiful thing ever, an empty elevator because I hate uncomfortable elevator silences with other people in it. Once inside I look out and see a pretty girl sitting at the end of the library. She had dark curly hair, a button nose, rosy cheeks, and full lips. She suddenly looks up and we lock eyes as the elevator doors closed. I wanted to leave the elevator and go to her but I just continued to stare at her eyes as the doors closed shut. Is she the one? Is this love? The moment passes and I think to myself …Wow, wow, wow!….now I have this elevator all to myself.

The next day I go to the library at the same time in the hopes of seeing her again. There she was, immersed in her studies. My mind was spinning. How should I approach? Should I do a direct approach and “grab her by the …um…ok…how do I say it in…um…hand.”

No, that won’t work. I should say something better. Say something witty.

I played with different pick up lines in my head that I could use:

Are you trying to trip me? Because I am falling for you.

Your name must be cholesterol because my blood pressure is rising.

I like empty elevators.

Crap! No….none of that will work. Think, think fast…

“Umm…is anybody sitting here?” I asked in a matter-of-fact manner. Smooth right. Yeah, I thought so at the time. She said,”No, go ahead.” I sat down. I pretended to study thinking of something else to say.

I have to say something really cool now. Something that will make her smile. Something that will make her feel like there was some magical, cosmic connection between us.

I blurted out “What are you studying?”

She smiled and says “A book for my history class.” Yes! She smiled. I am so good at this.

I need to close this thing before I say something even more brilliant and then she will think I am too good for her.

“Would you like to go out sometime,” I say with a smile. I would just like to add that there wasn’t an an ounce of desperation in my voice. Trust me. OK, maybe just a little.

Her cheeks turn deep red and shyly said,”OK.”

And the rest is history. We exchange phone numbers. I get up and head to the elevator. It was empty again. My life is good.

How we stayed together for 13 years?

Now I could answer this question with something cliche and mushy like saying “love” has kept us together all this time. But that is a cop out to what marriage really is and that is “work.” A marriage needs to be “worked on” and “love” by itself is not enough to keep a marriage together. I am leaving “love” out of the equation to get to the more practical side of a long lasting marriage. It is time to get SERIOUS.

Warning: There were several puns and jokes thus far but from this point onwards–not so much.

Know your Roles

Marriages usually fall apart when partners do not have defined roles. For example, my duties at home is to pay the bills, take out the garbage, clean the gutters, I will stop here because I don’t want to take too many gigabytes but you get the point. My wife has her role duties as well. I usually don’t interfere with her duties and she doesn’t interfere with mine. We each have our domains and respect each other’s contributions.

Respect Pact: Don’t call me stupid.

When we first got married we made a pact. The pact stated that we would not call each other demeaning names, especially names insulting the intelligence of either. This includes names such as stupid, idiot, dumb, moron, etc. Have we called each other demeaning names since the pact? I am definitely guilty here and so is she. We are not perfect. But we have NEVER called each other names that insult our intelligence. I have never called my wife stupid or anything similar and she hasn’t in return.

Communicate with the “I” method

All couples argue and get into fights sometimes. How is it handled after? Knowing the correct way of communicating an issue is of most importance. I was fortunate to learn this early on and shared it with my wife. In order to solve the problem it is best to use the “I” method instead of the “you” method. By the way, this method is also good to use in a workplace setting as well.

Examples of “I” method:                                      

I feel like you are ignoring me.

I am disappointed about how you said that.

Examples of “you” method:

You go out all the time.

You always say such things!

Notice that if you start your sentence with “you” it will sound more accusatory and it will automatically escalate conflict. However, if you start with “I feel” or “I think” it starts with the person saying it and it leaves an element of continued dialogue rather than a fight about “you did this” and “you did that.”

Logical arguments for not leaving your spouse.

For those logical fanatics. Below are two rational arguments for keeping a marriage together. Love is not included in these arguments but they are valid still.

The Novelty in Perpetual Error Argument

All marriages have what is known as the “honeymoon” period when everything is exciting and new. Then it wears off. Then one partner begins to seek that novelty and begin a relationship with another partner. There is excitement in this new relationship and leaves the other partner for this new relationship. Then the excitement wears off and they seek somebody new again. It becomes a perpetual cycle of cheating for seeking that “excited” feeling. The argument follows, why cheat at all or seek a new partner at all if ends up being the same, perpetually the same. It wouldn’t matter what partner the person ends up with, the “honeymoon” period will always end. And it will not matter how handsome, beautiful, if they are a movie star (look at the divorce rate for famous actors), rich, or famous the other person is. If there is one thing for sure, the “honeymoon” period will always end so there is no sense of leaving your partner only to experience the same scenario. You are better off staying.

The Wealth Argument

When you separate with your spouse, in most cases, you are losing half of your wealth. Not just money wealth, intellectual wealth is also lost as well. Remember all the role duties your spouse did, now you have to do them. Just imagine half of what you have suddenly vanishing. In closing, unless there is a prenup, expect to lose half your wealth and start doing all of your former spouse’ duties, therefore it is in everybody’s best interest wealth-wise to stay together. If there is a person outside your marriage with more wealth and you are interested in that person romantically, STOP. Before you act, apply the Novelty in Perpetual Error Argument and return to your spouse and be happy.

I know what your thinking. How dare you talk about wealth in relationships when love should be the focus? I know…..I know..kinda of douche-like and cold….so  I will end it by saying one thing.

I love my wife.

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I Have a Goal: Is That It? Can I be a Multimillionaire Now?

I have a goal to be a multimillionaire. Is that it? Can I be a Multimillionaire now? Let me go to the bank and draw out my millions. Or maybe it will magically appear under my bed. I know where I’ll find it. In my cereal box, wads of cash in there. I have a goal. Isn’t that enough for the millions to appear on my doorstep when I step out in a few minutes? Hold up, let me check. Nope. Not there. Nothing for me there. OK….OK…I think you get the point.

To become a multimillionaire it is NOT ENOUGH to just think about your goals but it is the BEST way to start. Throughout your life you are told by teachers, parents, TV, your boss to have goals. Every year people lay down their new year’s resolutions. We all know that goals are good for you. We all know goals are helpful in life. I am not here to convince you of that. You already know goals help and are useful. But there is more to it than just having goals bouncing around in your head.

After you have a goal in your head you MUST do the following to make it REAL:

ONE: WRITING YOUR GOALS DOWN ON PAPER, PHONE, OR COMPUTER

There is a big difference between writing your goal down and just thinking about it. When you write your goal down you are projecting what was inside your head and making the words concrete and real. Before it was in a fuzzy state in your mind. Now it has become part of your external reality. You made the words real. Now you can take your goals a step further and take the written goals from just concrete words to ACTUALIZATION. 

TWO: REREAD YOUR GOALS CONSTANTLY

Like I said before, many people already know goals are good for them. In fact, many people already write their goals down. But do they look at them constantly or do they bury them among other papers and forget about them? Did they write them in a note app then never looked at it again? Just writing your goals is still NOT ENOUGH. You must look at them close to a daily basis. It will help you maintain constant focus on your objective. Twice a day is better. Three times a day is best. More times than that and you are on your way to ACUALIZATION!

THREE: TEll SOMEBODY ABOUT YOUR GOALS

Tell people about your goals. The more people you tell the better. You want to do this to keep yourself ACCOUNTABLE. The people that are aware of your goal will frequently ask you “How is that thing going?” or “Is that project going well?” and you will need to have an answer. You will constantly need to update those people and we all want to see an improvement in your answer. It will keep you motivated.

FOUR: ACT FOR ACTUALIZATION

Last one is take action, move, do something that involves getting closer to your goal. This could mean research, writing, thinking, planning, any action that would lead you to your destination. Many people have the most trouble with this one. So let me help you. GET UP FROM YOUR SEAT AND MOVE!

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